December 08, 2004

IBM Name Change?

The news of IBM selling its PC business to China's Lenovo Group wasn't shocking to me. Big Blue hasn't been big in PCs for years. Dell and HP have whupped them in market share. The fact that a Chinese company bought the division doesn't bother me because IBM has been outsourcing PC manufacturing for years. You can't make this into an "America gets screwed by the Chinese" story. If we did get "screwed" it happened some time ago. What did raise my eyebrow (I can do it just like Spock) was this nugget:

Like other major Chinese manufacturers hoping to expand overseas, Lenovo is planning to leverage a well-known foreign brand name. Liu said the company would be entitled to freely use IBM's brand name in five years' time.

Expect IBM to not be called IBM five years from now. The company will be giving up a lot in branding, but with their focus on computer services and software they must feel a legendary household name wasn't worth as much as the $1.75 billion they got. Let's just hope they don't pick something stupid like Accenture.